As I approached retirement I discovered a big difference in the amount of tax I would have to pay depended mainly on where I live. A retirement friendly State can save you big bucks: I have researched all 50 states and found many states are very friendly to retires and unfortunately many are not.
The first thing you need to do is decide if you can afford to retire? After you do that the next thing is to decide if you want to retire this may sound silly but it's a big decision. What type of lifestyle you want in retirement, and how much money you think it might cost you.
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Once you decide that you are going to retire and what type of retirement lifestyle you want the next thing you must decide is the weather you prefer. Do you like hot, warm, cold or do you prefer all the seasons, winter, summer, fall, spring. That will determine where you live.
The most important financial decision will be where you live. There are many states you can live in what will tax everything you earn including your pension, IRA, 401k and Social Security, But there are also states that DO NOT TAX any of this. Think of the difference in you take home right now if you didn't have to pay taxes. This is even more important when you retire.
The good news is you can find out all this information by going to the website of each state you are considering. This does involve a little bit of work on your part since every state is different and some collect taxes on some of your income while others collect taxes on everything you earn and others still yet collect taxes on just part of your income. (example: in some states you might just pay taxes on the first $20,000 of your pension and nothing on the rest.). So decide where you are going to live and then contact the state government and you should be able to get all the information you need.